Billionaire chairman of United Spirits, Vijay Mallya, has been declared a “wilful defaulter” by the United Bank of India (UBI) calling his position as chairman of the company into question.

UBI claimed Mallya deliberately failed to pay an emergency overdraft lent to him to support his grounded Kingfisher Airlines venture.

Mallya attempted to challenge the claims in court, but was unsuccessful.

UBI has now become the first to officially brand Mallya a “wilful defaulter” and recommended his removal from United Spirits’ board.

The decision was reportedly taken after Kingfish Airlines officials failed to show up for a meeting with UBI.

Three other directors of Kingfisher Airlines have also been declared “willful defaulters” by UBI over the loan.

Other banks seeking to declare Mallya a wilful defaulter include the Punjab National Bank, IDBI bank, and the State Bank of India, according to reports.

A wilful defaulter tag prohibits an individual or company from accessing banks and capital markets for funding needs.

As chairman of both United Spirits, which was recently acquired by Diageo in a £1.1 billion deal, and United Breweries, concerns have been raised that the tag could prevent the companies from accessing bank funds.